Harbinger Capital

Not just because he’s not Jewish, but also because, according to Dealbook, he’s already got a bitter taste in his mouth. (Which, somewhat surprisingly, has nothing to do with his 5 year ban from the securities industry or Charlie Eregn.) Read more »

Richard Handler’s Leucadia National Corp. (LUK) added $253 million to its investment in Philip Falcone’s Harbinger Group (HRG) Inc., which owns businesses from consumer goods to insurance. Leucadia agreed to buy 23 million preferred securities in Harbinger Group from Falcone’s hedge funds for $11 apiece, Harbinger Group said today in a statement. That brings Leucadia’s total disclosed holding including common shares to $497 million, based on today’s closing price. Falcone, 51, is focused on building his publicly traded Harbinger Group after reaching a settlement with U.S. regulators that bars him from the hedge-fund industry. His Harbinger Capital Partners hedge funds are working to meet redemption requests as part of the August accord with the Securities and Exchange Commission. Falcone said in the statement that he’s pleased with the investment and called the two firms “a great fit.” [Bloomberg]

Phil Falcone has apparently found yet another bright side to being banned from the securities industry for 5 years: free time to run errands in the middle of the day. Read more »

Billionaire hedge-fund manager Philip Falcone’s $18 million settlement with U.S. regulators that includes a five-year ban from the securities industry and an admission of wrongdoing was accepted by a federal judge. U.S. District Judge Paul A. Crotty in Manhattan today said in a written order that the agreement reached last month with Falcone and Harbinger Capital Partners LLC is “appropriate and proportionate to the defendants’ admitted wrongful conduct.” [Bloomberg, earlier, earlier]

The light streaming into the hotel room blinded Wilbur. Or at least she thought it was a hotel room. She didn’t actually know where she was, or what time it was, or who the guy passed out next to her was. The only thing she knew for sure was that she had a pounding headache and that there was something sticking to the back of her knee. She reached down and peeled it off– a greasy crumpled up wrapper that judging by the smell once held a Taco Bell Gordita. Not that she could remember eating one, let alone doing so laying in bed next to a guy with a barbed wired tattoo inked around his arm, and then writing “If found call 555-9768 and ask for Phil” down his back with a tube of lipstick, though it was clearly her handwriting, her color, and her artistic sensibility in the stick figure drawings next to the note.

The phone on the nightstand lit up. Wilbur let it ring through. It lit up again. Who could possibly calling? Who knew she or man-of-unknown-origin were here? It lit up again. On the third ring she picked up.

“Hello?”

“Good afternoon!” a too chipper voice said on the other line. “This is your wake-up call.”

“I asked for a wake-up call?” From the looks of things she knew she certainly needed a wake up call, but not the kind that phoned you from the front desk, the kind that said splashed cold water on your face and said, “Wake up and take stock of your life lady you are in a hotel room with a guy with a barbed wire tattoo laying in a bed surrounded, literally, by trash, from Taco Bell. You don’t know what city or state you’re in and while you’re mercifully fully clothed and don’t have to contemplate what the spawn of this night of wrongs might look like, it appears somewhere in your travels you acquired a Credence Clearwater shirt that you turned into a crop top.”

“Why yes ma’am you did.”

“What time is it?”

“12:37PM on the dot, the exact time you asked us to call.”

“Do you know why I asked for that time?”

“I wasn’t working when you checked in ma’am but let me check the notes. Let me see, it says here you told Bobby ‘Must be up by 12:37, no earlier, not later, have business to tend to. Do not fuck me on this Bobert. Are you writing this down Bobert? Make sure you’re writing this down.’”

“Jesus fucking Christ,” Wilbur muttered under her breath.

“Sorry ma’m I didn’t catch that.”

“Nothing. Thanks.”

*************************************************************

24 hours earlier Read more »

“I believe putting these issues behind me now is the best course of action for me and our investors,” Falcone said in a statement. The fallen hedgie said the deal will allow him to focus on his publicly traded entity, Harbinger Group, and his wireless venture LightSquared, which is struggling to emerge from bankruptcy. [NYP, earlier]

Remember, back in 2009, when Phil Falcone’s personal accountants realized that the hedge fund manager owed the government more than $100 million in state and federal taxes? And he decided to come up with the cash by “loaning” himself $113 million from a gated investor fund? It’s one of our favorite Falcone stories and we bring it up today because it’s one of the reasons, among many, that the Harbinger Capital founder just agreed to pay the Securities and Exchange Commission $18 million, admit wrongdoing, and take a five year involuntary break from the securities industry. For those who need a refresh, here’s how the idea for Falcone to help himself to the money came about, courtesy of the SEC:

1. After figuring out Falcone was in the hole for over one hundred mill, Phil’s accountants informed Harbinger’s COO, Peter Jenson, of the problem.

2. Jenson made some calls and let his boss know that “no bank would accept Falcone’s hedge fund interests as collateral.”

3. Jenson suggested that Falcone “proceed with appraisals of Falcone’s two Manhattan townhouses and artwork, and raised the possibility of borrowing against other assets, including Falcone’s interest in a National Hockey League team and an estate on the island of St. Barts.”

4. Falcone said nothing but quietly stewed. Borrow against his interest in the Minnesota Wild? He couldn’t believe Jenson had the balls to even mention it. Especially when all that investor money was just sitting there, practically begging to be used… Read more »